Income Taxes

6 Months Ended

Sep. 30, 2025

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The Company recorded an income tax benefit of $1,446,000 and $1,186,000 for the three and six months ended September 30, 2025, respectively, and income tax benefit of $4,908,000 and $1,488,000 for the three and six months ended September 30, 2024, respectively. Income tax as a percentage of pre-tax income was (46)% and (78)% in the three and six months ended

September 30, 2025. Income tax as a percentage of pre-tax loss was 25% and 19% in the three and six months ended September 30, 2024. Typically these percentages vary from the U.S. statutory rate of 21% primarily due to varying statutory tax rates at the Company's foreign subsidiaries, and the jurisdictional mix of income for these subsidiaries.

Additionally during the three and six months ended September 30, 2025, income tax was favorably impacted by the Act for an Immediate Tax Investment Programme to Strengthen Germany as a Business Location (the "New German Tax Law"). The New German Tax Law enacted in July 2025 will lower the German corporate income tax rate from 15% to 10% by 2032. The associated revaluation of the Company’s German net deferred tax liabilities results in an income tax benefit of approximately $3,200,000 for the quarter ended September 30, 2025. The effective tax rate for the three and six months ended September 30, 2025, also reflects an unfavorable impact of approximately $712,000 related to the recognition of a U.S. state tax reserve. The reserve primarily relates to the valuation of state tax attributes and if settled would have minimal cash tax impact.

The Company estimates that the effective tax rate related to continuing operations will be approximately 21% for fiscal 2026. This rate is reflective on an expected 8% favorable rate impact from the New German Tax Law discussed above, as well as an estimated 2% unfavorable impact from establishment of the state tax reserve as previously discussed.

On July 4, 2025, H.R.1, also known as the "One Big Beautiful Bill Act" ("OBBBA") was enacted into law in the United States, with many of its provisions taking effect during the Company's 2026 fiscal year. The income tax benefit calculated for the three and six months ended September 30, 2025 reflects consideration of the OBBBA. The impact to the Company’s effective tax rate as a result of the OBBBA is not expected to be material for the 2026 fiscal year.

Refer to the Company’s consolidated financial statements included in the 2025 Form 10-K for further information on income taxes.